The US Financial Accounting Standards Board’s
proposals for financial instruments accounting lack quality,
according to the European Financial Reporting Advisory Group
(EFRAG).
A draft comment letter from EFRAG said the
FASB exposure draft does not give appropriate emphasis to the
business model and does not reflect the range of business models
that exist globally.
The EFRAG said the path taken by the
International Accounting Standards Board (IASB) in its project to
replace IAS 39 Financial Instruments: Recognition and Measurement
is far preferable to the FASB proposals.
The IASB and FASB are supposed to be working
together towards a converged financial instruments standard.
However, a recent FASB exposure draft contains very different
proposals to those released by the IASB during the past 12
months.
EFRAG has called for the direction set by the
IASB to form the basis for the development of a converged
standard.
“We consider that both boards should work
together to develop a standard in the direction set by the IASB,”
EFRAG wrote.
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By GlobalDataEFRAG is inviting comments on its draft letter
by 13 September.
EFRAG’s comment letter will be submitted to
both the IASB and the FASB before the 30 September deadline for
comments on the FASB’s financial instruments proposals.
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